Tagged: low cost

Don’t go looking in the detailed cost breakdowns. Sure, Apple has plenty of profit margin to shave off the iPhone. They could sell one for $150 and still make a profit better than most. But it is not in the market share figures either. And it isn’t some complicated marketing reason, anything about a premium brand and the Apple aura. The reason that Apple doesn’t go downmarket in price to attract a greater market share is actually much more simple:

They can’t suppport it.

If you have ever played the Mac vs PC game, there are a few trump cards. Mac users always (rightly) claim superior design and good looks. PC users however often ask their graphic designer opponent something closer to home: “…and what OS does the computer you are doing your company’s accounts run?” Outside the US and UK the answer is usually Windows. “What company makes the OS on your medium sized companies’ servers?” That won’t be Apple either. In fact I have yet to find any compelling proof that even Apple Inc itself runs any heavy duty work of its own on machines made by Apple. (If you have evidence to the contrary, please drop a comment at the end of this article.)

Apple’s famous ecosystem doesn’t run on Apple servers. While Google leads the planet in data center design and software economies, while they pioneer efficient energy usage and blazing speed in every transaction, Apple is very very far behind. And then some. This is a company that couldn’t even support it’s own emailing system properly, not even for die hard fans was it good enough. Apple buys capacity from others. This is a company that basically rebrands other people’s technology, they have no idea how to design a system as elegant in it’s massive scale as Amazon’s server infrastructure. Others are breaking new groung in improving databases and every aspect of computer transactions while Apple plays around buying patents and suing.

So how exactly would Apple support us if the entire planet started using iPhones and iPads? While they are all just playing games and – literally – twiddling their thumbs on their touch screens, things hold up. If they all started looking for serious infrastructure support, if they started actually trying to work online concurrently, the system would crash and the lawsuits would start. Apple would have to announce a partnership with someone like Google or Amazon to scale up quickly.

We can all find bones to pick with Microsoft but this is a company that has made sure that roughly 90% of the planet’s personal computers and a lot of its servers actually work and exchange software, files and information for the past two decades pretty well. I can take the accounting software I used on MS Dos, stick it in the latest PC off the shelf and run it. It will even support an amazing selection of the planet’s hardware and accessories.

So don’t hold your breath. If Apple wants to take market share, I look forward to hearing about it’s robust infrastructure first. Doing business in regions where most people won’t actually use anything “smart” online on their smartphoen doesn’t cut it. Unless Tim Cook just goes ahead anyway and admits it: “we don’t make the fastest or safest browser, we don’t even control Apple computer hardware ourselves really, heck, we in fact we outsource all our infrastructure. Get a life! Apple isn’t about superior technology, it is about the user experience.”